How Healthcare Technology Can Support and Guide Independent Practices

April 17, 2024 - Independent physician practices face a multitude of challenges in an increasingly complex healthcare landscape—from mounting administrative burdens and declining reimbursement rates to maintaining proper staff levels and overcoming technology deficits.

"Healthcare costs are going up for providers and patients alike," says Dr. Auren Weinberg, MD, MBA, chief medical officer of Veradigm and practicing independent physician. "As margins continue to shrink, every dollar becomes extremely critical. Any little bit of improved efficiency, lowered cost, improved revenue, faster payment, more accurate payment—any of those things—every little fraction of a percent makes a huge difference and can mean the difference between a profitable year and a year with a loss."

Navigating financial and administrative challenges

For smaller practices, limited resources can hinder effective revenue cycle management as providers work to keep pace with changing payment rules and growing trends in claim delays and denials. The latter is troubling given recent claims management findings. According to a survey by Kodiak RCA (formerly Crowe, a healthcare consulting firm), initial denials have increased by 18.1% and claims outstanding for over 90 days have grown by 33% for commercial insurers and over 40% for Medicare Advantage plans since 2020.

Amid these operational challenges, the inconsistency in payer rules exacerbates the situation, further straining provider resources. These discrepancies contribute significantly to delays in payments, amplifying the financial strain on practices by postponing revenue and increasing the burden on staff to manage and resolve these delays.

"The rules between one payer and another are not often consistent, and there is a struggle every time you have a claim rejected or delayed," Dr. Weinberg emphasizes. "Every delay to payment is revenue postponed and narrows that margin even more because time is money. Additionally, each delay has another cost—somebody has to follow up on it."

To properly manage delays and denials, staff members require skills equal to the task.

"You can't just plug and play. You can't pull someone in off the street or move someone over from the front desk to help follow up on claim denials. It must be someone who knows what they're doing. Doing that is getting increasingly expensive as well," Dr. Weinberg adds.

Even when skilled staff can address claims management, the strategic use of limited personnel can easily pit revenue cycle management against clinical operations.

"The practice is caught between paying attention to the patient directly and their needs and chasing after the dollars they are owed," Dr. Weinberg observes. "And, of course, that impacts care, outcomes and satisfaction. It just hits everything across the board. Anything that can reduce extra work is key to ensuring that the practice can focus on patient care and not have to deal with an administrative headache."

Independent practices must prioritize efficiency and strategic resource management to sustain operations and deliver quality patient care. Having the right technology partner can increase the likelihood of success.

Technology: A catalyst for efficiency

Technology can provide independent providers with a pathway to streamline operations, enabling them to enhance efficiency, reduce administrative burdens and dedicate more time to patient care through automated processes and integrated systems.

According to Dr. Weinberg, the integration offered by modern technology eliminates inefficiencies from coordinating with payers and clearing houses across disparate systems. Integrating all services within a single entity simplifies identifying and addressing issues quickly, leading to more efficient problem resolution. Additionally, this approach emphasizes the importance of a personal touch in service delivery.

Selecting the appropriate technology is a critical decision given the unique characteristics of independent practices compared to their peers.

"The importance of streamlining and having work processes that are smooth is much more important for an independent practice to survive than one within a large integrated health system with multiple lines of revenue that can support a practice that itself is not making money or assist in negotiating better rates with health plans," Dr. Weinberg explains.

With value-based care becoming a permanent feature of healthcare reimbursement, independent practices must have access to technology and services to tackle quality and risk.

"Value-based care is becoming increasingly crucial," says Dr. Weinberg. "Practices operating without the support of larger healthcare systems require guidance to navigate and excel in value-based contracts effectively. As healthcare shifts towards assessing doctors based on the value they deliver, having a knowledgeable technology expert on the team becomes vital. This collaboration is essential not just for meeting value-based care metrics but also for the survival and continued independence of these practices in a healthcare landscape that prioritizes value."

In an evolving healthcare landscape, independent physician practices must overcome numerous challenges to sustain operations and maintain their commitment to delivering quality patient care. The growing complexity of administrative tasks and financial challenges, such as lower payment rates and the need for efficient claims handling, highlight the need for careful planning and operational efficiency.

Adopting technology and the right synergy can significantly mitigate these challenges, enabling practices to streamline operations and focus on patient care. Embracing technology that supports efficient practice management and aligns with value-based care metrics is not just a pathway to survival—it's a strategic move towards thriving in the modern healthcare ecosystem.